Testimony Before the Subcommittee on 

National Security, Emerging Threats, and 

International Relations, Committee on 

Government Reform, House of 

Representatives

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 2:00 p.m. EST 

Tuesday, March 9, 2004 NONPROLIFERATION 

Improvements Needed for 

Controls on Exports of 

Cruise Missile and 

Unmanned Aerial Vehicle 

Technology 

Statement of Joseph A. Christoff, Director 

International Affairs and Trade 

GAO-04-493T 
www.gao.gov/cgi-bin/getrpt?GAO-04-493T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Joseph A. 

Christoff at (202) 512-8979 or 

christoffj@gao.gov. 

Highlights of GAO-04-493T, testimony 

before the Subcommittee on National 

Security, Emerging Threats, and 

International Relations, Committee on 

Government Reform, House of 

Representatives 

Tuesday, March 9, 2004 

NONPROLIFERATION 

Improvements Needed for Controls on 

Exports of Cruise Missile and Unmanned 

Aerial Vehicle Technology 

The growing threat to U.S. national security of cruise missile and UAV 

proliferation is challenging the tools the United States has traditionally 

used. Multilateral export control regimes have expanded their lists of 

controlled technologies that include cruise missile and UAV items, but 

key countries of concern are not members. U.S. export control 

authorities find it increasingly difficult to limit or track unlisted dual-use 

items that can be acquired without an export license. Moreover, a gap in 

U.S. export control authority enables American companies to export 

certain dual-use items to recipients that are not associated with missile 

projects or countries listed in the regulations, even if the exporter knows 

the items might be used to develop cruise missiles or UAVs. American 

companies have in fact legally exported dual-use items with no U.S. 

government review to a New Zealand resident who bought the items to 

build a cruise missile.

The U.S. government seldom uses its end-use monitoring programs to 

verify compliance with conditions placed on the use of cruise missile, 

UAV, or related technology exports. For example, State officials do not 

monitor exports to verify compliance with license conditions on missiles 

or other items, despite legal and regulatory requirements to do so. 

Defense has not used its end-use monitoring program initiated in 2002 to 

check the compliance of users of more than 500 cruise missiles exported 

between fiscal years 1998 and 2002. Commerce conducted visits to assess 

the end use of items for about 1 percent of the 2,490 missile-related 

licenses we reviewed. Thus, the U.S. government cannot be confident 

that recipients are effectively safeguarding equipment in ways that 

protect U.S. national security and nonproliferation interests. 

A Chinese SILKWORM Cruise Missile in Iraq 

Cruise missiles and unmanned 

aerial vehicles (UAV) pose a 

growing threat to U.S. national 

security interests as accurate, 

inexpensive delivery systems 

for conventional, chemical, and 

biological weapons. GAO 

assessed (1) the tools the U.S. 

and foreign governments use to 

address proliferation risks 

posed by the sale of these items 

and (2) efforts to verify the end 

use of exported cruise missiles, 

UAVs, and related technology. 

The Secretary of Commerce 

should assess and report to 

Congress on the adequacy of an 

export regulation provision to 

address missile proliferation by 

nonstate actors and on ways the 

provision might be modified to 

address a gap in U.S. export 

control authority. 

The Secretaries of State, 

Commerce, and Defense each 

should complete a 

comprehensive assessment of 

cruise missile, UAV, and related 

dual-use transfers to determine 

if U.S. exporters and foreign end

users comply with conditions 

related to the transfers. 

Commerce and Defense 

partially agreed with the 

recommendations. State 

disagreed to complete an 

assessment, but said it would 

pay special attention to the need 

for more checks on cruise 

missile and UAV transfers. 
Page 1 GAO-04-493T Nonproliferation 

Mr. Chairman and Members of the Committee, 

I am pleased to be here today to discuss GAO’s report1

 on U.S. efforts to 

limit the proliferation of cruise missiles and unmanned aerial vehicles 

(UAV). These efforts are complicated by the widespread availability of 

these items among countries of concern.2

 The U.S. government faces tradeoffs when making decisions about transfers of cruise missiles, UAVs, or 

related technology. The United States wants to prevent the proliferation of 

these weapons systems to countries of concern and terrorists. At the same 

time, the U.S. government has an interest in encouraging transfers of 

cruise missiles and UAVs to U.S. allies to support regional security and 

bilateral relations. The U.S. government also wants to use these sales to 

help maintain the health of the U.S. defense industrial base. 

You asked us to assess U.S. and international efforts to limit the 

proliferation of cruise missiles, unmanned aerial vehicles, and related 

technology. Specifically, we assessed (1) the nature and extent of cruise 

missile and UAV proliferation; (2) the nonproliferation tools that the 

United States uses to address the proliferation risks posed by the sale of 

these items; and (3) U.S. and other governments’ efforts to verify the end 

use of exported cruise missiles, UAVs, and related technology. 

To address these issues, we reviewed analyses prepared by the 

Departments of State, Commerce, Defense, and Homeland Security, and 

the U.S. intelligence community, as well as studies prepared by 

nonproliferation experts. We also reviewed multilateral export control 

regime3

 documentation; met with representatives of the Missile 

Technology Control Regime (MTCR) in Paris, France; and interviewed 

government officials in France, Italy, and the United Kingdom. 

Furthermore, we analyzed export licensing information from the 

 1

U.S. General Accounting Office, Nonproliferation: Improvements Needed to Better 

Control Technology Exports for Cruise Missiles and Unmanned Aerial Vehicles, 

GAO-04-175 (Washington, D.C.: Jan. 23, 2004). 

2

Countries of missile proliferation concern listed in the Export Administration Regulations 

are Bahrain, China, Egypt, India, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Macau, 

North Korea, Oman, Pakistan, Qatar, Saudi Arabia, Syria, United Arab Emirates, and 

Yemen. 

3

Multilateral export control regimes are voluntary, nonbinding arrangements among 

likeminded supplier countries that aim to restrict trade in sensitive technologies to 

peaceful purposes. Regime members agree to restrict such trade through their national 

laws and regulations, which set up systems to license the exports of sensitive items. 
Page 2 GAO-04-493T Nonproliferation 

Departments of State, Commerce, and Defense on exports of cruise 

missiles, UAVs, and related dual-use technology that have both military 

and civilian applications. 

In summary, we found that 

• Cruise missiles and UAVs pose a growing threat to U.S. national 

security interests as accurate and inexpensive delivery systems for 

conventional, chemical, and biological weapons. Conventional anti-ship 

cruise missiles pose an immediate threat to U.S. naval vessels because 

of the widespread availability of these weapons worldwide. At least 70 

nations currently possess some type of anti-ship missiles armed with 

conventional, high explosive warheads, and at least 32 nations are 

developing or manufacturing more than 250 models of UAVs. Landattack cruise missiles pose a future threat to the U.S. homeland 

because of the anticipated growth in the availability of these more 

accurate, longer-range systems. The widespread availability of 

commercial items, such as global positioning systems and lightweight 

engines, has made it easier for countries and terrorists to acquire or 

build at least rudimentary cruise missile or UAV systems. 

• The United States primarily uses multilateral export control regimes 

and national export controls among other tools to address the threat 

associated with cruise missile and UAV proliferation. Between 1997 

and 2002, multilateral export control regimes have added cruise missile 

and UAV-related items to their control lists, thereby committing regime 

members to provide greater scrutiny to these items before licensing 

them for export. However, nonmembers such as China and Israel 

continue to acquire, develop, and export cruise missile or UAV 

technology. This growing capability of nonmember supplier countries 

to develop technologies used for weapons of mass destruction and 

trade them with other countries of proliferation concern undermines 

the regimes’ ability to impede proliferation. In addition, the United 

States faces limitations in applying national export controls. First, the 

U.S. government finds it difficult to identify and track widely available 

dual-use items that are not on control lists but that can be used for 

cruise missile and UAV proliferation purposes. Second, a gap in U.S. 

catch-all control regulations4

 enabled American companies to legally 

 4

Catch-all controls are controls that authorize a government to require an export license for 

items that are not on control lists but that are known or suspected of being intended for 

use in a missile or weapons of mass destruction (WMD) program. 

Summary 
Page 3 GAO-04-493T Nonproliferation 

export dual-use items to a New Zealand resident who bought the items 

to show how a terrorist could legally build a cruise missile. 

• The U.S. government uses post-shipment verification (PSV) visits as a 

key tool available to confirm that the recipients of sensitive U.S. 

technologies are using them in accordance with license conditions. 

However, of 786 licenses for cruise missile and UAV technology that 

the Department of State issued between fiscal years 1998 and 2002, it 

conducted verification visits on only 4 licenses. The Department of 

Defense conducted no monitoring over more than 500 cruise missiles 

and related items that it transferred to other countries between fiscal 

years 1998 and 2002. The Department of Commerce conducted 

verification visits on 1 percent of nearly 2,500 missile-related licenses 

issued between fiscal years 1998 to 2002. 

We are recommending that the Secretary of Commerce assess and report 

to Congress on the adequacy of the export control regulations’ catch-all 

provision to address missile proliferation by nonstate actors and on ways 

the provision might be modified. We are also recommending that the 

Secretaries of State, Commerce, and Defense each complete a 

comprehensive assessment of the nature and extent of compliance with 

license conditions on cruise missiles, UAVs, and related dual-use 

technology. Commerce and Defense partially agreed with the 

recommendations. State disagreed to complete an assessment, but said it 

would pay special attention to the need for more checks on cruise missile 

and UAV transfers. 

Distinctions between cruise missiles and UAVs are becoming blurred as 

the militaries of many nations, in particular the United States, attach 

missiles to traditional reconnaissance UAVs and develop UAVs dedicated 

to combat missions. A UAV, a pilotless vehicle that operates like an 

airplane, can be used for a variety of military and commercial purposes. 

UAVs are available in a variety of sizes and shapes, propeller-driven or jet 

propelled, and can be straight-wing aircraft or have tilt-rotors like 

helicopters. They can be as small as a model aircraft or as large as a U-2 

manned reconnaissance aircraft. A cruise missile is an unmanned aerial 

vehicle designed for one-time use, which travels through the air like an 

airplane before delivering its payload. A cruise missile consists of four 

major components: a propulsion system, a guidance and control system, 

an airframe, and a payload. The technology for the engine, the autopilot, 

and the airframe could be similar for both cruise missiles and UAVs, 

according to a 2000 U.S. government study of cruise missiles. 

Background 
Page 4 GAO-04-493T Nonproliferation 

Cruise missiles provide a number of military capabilities. For example, 

they present significant challenges for air and missile defenses. Cruise 

missiles can fly at low altitudes to stay below radar and, in some cases, 

hide behind terrain features. Newer missiles are incorporating stealth 

features to make them less visible to radars and infrared detectors. 

Furthermore, land-attack cruise missiles may fly circuitous routes to get to 

their targets, thereby avoiding radar and air defense installations. 

U.S. policy on the proliferation of cruise missiles and UAVs is expressed in 

U.S. commitments to the MTCR and Wassenaar Arrangement. These 

multilateral export control regimes are voluntary, nonbinding 

arrangements among like-minded supplier countries that aim to restrict 

trade in sensitive technologies. Regime members agree to restrict such 

trade through their national laws and regulations, which set up systems to 

license the exports of sensitive items. The four principal regimes are the 

MTCR; the Wassenaar Arrangement, which focuses on trade in 

conventional weapons and related items with both civilian and military 

(dual-use) applications; the Australia Group, which focuses on chemical 

and biological technologies; and the Nuclear Suppliers Group, which 

focuses on nuclear technologies. The United States is a member of all four 

regimes. Regime members conduct a number of activities in support of the 

regimes, including (1) sharing information about each others’ export 

licensing decisions, including certain export denials and, in some cases, 

approvals and (2) adopting common export control practices and control 

lists of sensitive equipment and technology into national laws or 

regulations. 

Exports of commercially supplied American-made cruise missiles, military 

UAVs, and related technology are transferred pursuant to the Arms Export 

Control Act, as amended, and the International Trafficking in Arms 

Regulations, implemented by State. Government-to-government transfers 

are made pursuant to the Foreign Assistance Act of 1961, as amended, and 

are subject to DOD guidance. Exports of dual-use technologies related to 

cruise missiles and UAVs5

 are transferred pursuant to the Export 

 5

Related items include technical data, subcomponents, and spare parts. 
Page 5 GAO-04-493T Nonproliferation 

Administration Act of 1979, as amended,6 and the Export Administration 

Regulations,7

 implemented by Commerce. 

The Arms Export Control Act, as amended in 1996, requires the President 

to establish a program for end-use monitoring of defense articles and 

services sold or exported under the provisions of the act and the Foreign 

Assistance Act.8

 This requirement states that, to the extent practicable, 

end-use monitoring programs should provide reasonable assurance that 

recipients comply with the requirements imposed by the U.S. government 

on the use, transfer, and security of defense articles and services. In 

addition, monitoring programs, to the extent practicable, are to provide 

assurances that defense articles and services are used for the purposes for 

which they are provided. The Export Administration Act, as amended, 

provides the Department of Commerce with the authority to enforce dualuse controls. Under the act, Commerce is authorized to conduct PSV visits 

outside the United States of dual-use exports.9

Although cruise missiles and UAVs provide important capabilities for the 

United States and its friends and allies, in the hands of U.S. adversaries 

they pose substantial threats to U.S. interests. First, anti-ship cruise 

missiles threaten U.S. naval forces deployed globally. We reported in 2000 

that the next generation of anti-ship cruise missiles—most of which are 

now expected to be fielded by 2007—will be equipped with advanced 

target seekers and stealthy design.10 These features will make them more 

difficult to detect and defeat. At least 70 nations possess some type of 

cruise missile, mostly short-range, anti-ship missiles armed with 

conventional, high-explosive warheads, according to a U.S. government 

study. Countries that export cruise missiles currently include China, 

France, Germany, Israel, Italy, Norway, Russia, Sweden, United Kingdom, 

and the United States. China and Russia have sold cruise missiles to Iran, 

 6

50 U.S.C. app. §§ 2401 and following. Executive Order 13222, 66 Fed. Reg. 44025 and 

subsequent presidential notices continue the export control regime established under the 

act and the Export Administration Regulations. 

7

15 C.F.R. §§ 730-774. 

8

22 U.S.C. § 2785. 

9

50 U.S.C. app § 2411(a)(1). 

10U.S. General Accounting Office, Defense Acquisitions: Comprehensive Strategy Needed 

to Improve Ship Cruise Missile Defense, GAO-NSIAD-00-149 (Washington, D.C.: July 2000). 

Proliferation of Cruise 

Missiles and UAVs 

Poses a Growing 

Threat to U.S. 

National Security 

Interests 
Page 6 GAO-04-493T Nonproliferation 

Iraq, Libya, North Korea, and Syria. Nations that manufacture but do not 

yet export cruise missiles currently include Brazil, India, Iran, Iraq, North 

Korea, South Africa, and Taiwan. None of these nonexporting 

manufacturing countries is a member of the Wassenaar Arrangement, and 

only Brazil and South Africa are in the MTCR. 

Second, land-attack cruise missiles have a potential in the long-term to 

threaten the continental United States and U.S. forces deployed overseas. 

Various government and academic studies have raised concerns that the 

wide availability of commercial items, such as global positioning system 

receivers and lightweight engines, allows both countries and nonstate 

actors to enhance the accuracy of their systems, upgrade to greater range 

or payload capabilities, and convert certain anti-ship cruise missiles into 

land-attack cruise missiles. Although not all cruise missiles can be 

modified into land-attack cruise missiles because of technical barriers, 

specific cruise missiles can and have been. For example, a 1999 study 

outlined how the Chinese Silkworm anti-ship cruise missile had been 

converted into a land-attack cruise missile.11 Furthermore, the Iraq Survey 

Group reported in October 2003 that it had discovered 10 Silkworm antiship cruise missiles modified to become land-attack cruise missiles and 

that Iraq had fired 2 of these missiles at Kuwait. According to an 

unclassified national intelligence estimate,12 several countries are 

technically capable of developing a missile launch mechanism to station 

on forward-based ships or other platforms to launch land-attack cruise 

missiles against the United States. 

Finally, UAVs represent an inexpensive means of launching chemical and 

biological attacks against the United States and allied forces and territory. 

For example, the U.S. government reported its concern over this threat in 

various meetings and studies. The Acting Deputy Assistant Secretary of 

State for Nonproliferation testified in June 2002 that UAVs are potential 

delivery systems for WMD, and are ideally suited for the delivery of 

chemical and biological weapons given their ability to disseminate 

aerosols in appropriate locations at appropriate altitudes. He added that, 

 11Feasibility of Third World Advanced Ballistic and Cruise Missile Threat, Volume 2: 

Emerging Cruise Missile Threat, Systems Assessment Group; National Defense Industrial 

Association Strike, Land-Attack and Air Defense Committee (Washington, D.C.: August 

1999). 

12Foreign Missile Developments and the Ballistic Missile Threat Through 2015, 

Unclassified Summary of a National Intelligence Estimate, National Intelligence Council 

(Washington, D.C.: December 2001). 
Page 7 GAO-04-493T Nonproliferation 

although the primary concern has been that nation-states would use UAVs 

to launch WMD attacks, there is potential for terrorist groups to produce 

or acquire small UAVs and use them for chemical or biological weapons 

delivery. 

The U.S. government generally uses two key nonproliferation tools—-

multilateral export control regimes and national export controls—to 

address cruise missile and UAV proliferation, but both tools have 

limitations. The United States and other governments have traditionally 

used multilateral export control regimes, principally the MTCR, to address 

missile proliferation. However, despite successes in strengthening 

controls, the growing capability of countries of concern to develop and 

trade technologies used for WMD limits the regime’s ability to impede 

proliferation. For example, between 1997 and 2002, the United States and 

other governments successfully revised the MTCR’s control lists of 

sensitive missile-related equipment and technology to include six of eight 

U.S.-proposed items related to cruise missile and UAV technology. Adding 

items to the control lists commits regime members to provide greater 

scrutiny when deciding whether to license the items for export. Despite 

the efforts of these regimes, nonmembers such as China and Israel 

continue to acquire, develop, and export cruise missile or UAV technology. 

The growing capability of nonmember supplier countries to develop 

technologies that could be used for WMD and trade them with other 

countries of proliferation concern undermines the regimes’ ability to 

prevent proliferation. 

In October 2002, we reported on other limitations that impede the ability 

of the multilateral export control regimes, including the MTCR and 

Wassenaar Arrangement, to achieve their nonproliferation goals. We found 

that MTCR members may not share complete and timely information, such 

as members’ denied export licenses, in part because the regime lacks an 

electronic data system to send and retrieve such information. The 

Wassenaar Arrangement members share export license approval 

information but collect and aggregate it to a degree that it cannot be used 

constructively. Both MTCR and the Wassenaar Arrangement use a 

consensus-based process that makes decision-making difficult. The 

regimes also lack a means to enforce compliance with members’ political 

commitments to regime principles. We recommended that the Secretary of 

State establish a strategy to work with other regime members to enhance 

the effectiveness of the regimes by implementing a number of steps, 

including (1) adopting an automated information-sharing system in MTCR 

to facilitate more timely information exchanges, (2) sharing greater and 

Key Nonproliferation 

Tools Have 

Limitations 

Addressing Cruise 

Missile and UAV 

Proliferation 
Page 8 GAO-04-493T Nonproliferation 

more detailed information on approved exports of sensitive transfers to 

nonmember countries, (3) assessing alternative processes for reaching 

decisions, and (4) evaluating means for encouraging greater adherence to 

regime commitments.13 However, State has not been responsive in 

implementing the recommendation to establish a strategy to enhance the 

effectiveness of the regimes. State officials said that the recommendation 

is under consideration in a review by the National Security Council that 

has been ongoing for over a year. 

The U.S. government uses its national export control authorities to 

address missile proliferation but finds it difficult to identify and track 

commercially available items not covered by control lists. For example, 

Bureau of Immigration and Customs Enforcement agents upon inspecting 

an item to be exported might identify that the item is a circuit board, but 

not that it is part of a guidance system and that the guidance system is 

intended for a cruise missile. Moreover, a gap in the catch-all provision of 

U.S. export control regulations could allow subnational actors to acquire 

American cruise missile or UAV technology for missile proliferation or 

terrorist purposes without violating U.S. export control laws or 

regulations. This gap in U.S. export control authority enabled American 

companies to legally export dual-use items to a New Zealand resident who 

bought the items to show how a terrorist could legally build a cruise 

missile. The gap results from current regulations that restrict the sale of 

certain dual-use items to national missile proliferation projects and 

countries of concern, but not to nonstate actors such as certain terrorist 

organizations or individuals.14 The United States has other nonproliferation 

tools to address cruise missile and UAV proliferation—diplomacy, 

sanctions, and interdiction of illicit shipments of items—but these tools 

have had unclear results or have been little used. 

 13U.S. General Accounting Office, Nonproliferation: Strategy Needed to Strengthen 

Multilateral Export Control Regimes, GAO-03-43 (Washington, D.C.: Oct. 25, 2002). 

14See 15 C.F.R. § 744.3(a). Although the Export Administration Regulations restrict exports 

to terrorist organizations and individuals that are listed in the regulations, the regulations 

do not apply to those that are not listed. 
Page 9 GAO-04-493T Nonproliferation 

End-use monitoring refers to the procedures used to verify that foreign 

recipients of controlled U.S. exports use such items according to U.S. 

terms and conditions of transfer. A post-shipment verification visit is a key 

end-use monitoring tool for U.S. agencies to confirm that authorized 

recipients of U.S. technology both received transferred items and used 

them in accordance with conditions of the transfer. 

State is responsible for conducting PSVs on direct commercial sales of 

cruise missiles, UAVs, and related technology. We found that State did not 

use PSVs to assess compliance with cruise missile or UAV licenses having 

conditions limiting how the item may be used. These licenses included 

items deemed significant by State regulations.15 Based on State licensing 

data, we identified 786 licenses for cruise missiles, UAVs, or related items16

from fiscal years 1998 through 2002. Of these, 480 (61 percent) were 

licenses with conditions, while 306 (39 percent) were licenses without 

conditions. We found that State did not conduct PSVs for any of the 480 

licenses with conditions and conducted PSVs on 4 of 306 licenses 

approved without conditions. A State licensing official stated that few 

post-shipment checks have been conducted for cruise missiles, UAVs, and 

related items because many are destined for well-known end users in 

friendly countries. However, over fiscal years 1998 through 2002, 129 of 

the 786 licenses authorized the transfer of cruise missile and UAV-related 

items to countries such as Egypt, Israel, and India. These countries are not 

MTCR members, which indicates that they might pose a higher risk of 

diversion. 

In commenting on a draft of our report, State emphasized the importance 

of pre-license checks in verifying controls over the end user and end use of 

exported items and said that we did not include such checks in our 

analysis. We therefore reviewed the original 786 cruise missile and UAV 

licenses to determine how many had received pre-license checks, a 

possible mitigating factor reducing the need to conduct a PSV. We found 

that only 6 of the 786 licenses from fiscal years 1998 through 2002 that 

State provided us had been selected for pre-license checks. 

 15The International Trafficking in Arms Regulations define significant military equipment as 

articles for which special export controls are warranted because of their capacity for 

substantial military utility or capability. 22 C.F.R. § 120.7. 

16Related items may include spare parts, software, or technical data. 

Compliance with 

Conditions on 

Exports of Cruise 

Missiles, UAVs, and 

Dual-use Items 

Seldom Verified 

through End-use 

Monitoring 
Page 10 GAO-04-493T Nonproliferation 

Defense is responsible for monitoring transfers of cruise missiles, UAVs, 

and related technology provided under government-to-government 

agreements through the Foreign Military Sales program. Defense’s end-use 

monitoring program has conducted no end-use checks related to cruise 

missile or UAV transfers, according to the program director. From fiscal 

years 1998 through 2002, DOD approved 37 agreements for the transfer of 

more than 500 cruise missiles and related items, as well as one transfer of 

UAV training software. The agreements authorized the transfer of 

Tomahawk land-attack cruise missiles, Standoff land-attack missiles, and 

Harpoon anti-ship cruise missiles, as well as supporting equipment such as 

launch tubes, training missiles, and spare parts. Approximately 30 percent 

of cruise missile transfers were destined for non-MTCR countries. Despite 

the 1996 legal requirement to create an end-use monitoring program, 

Defense’s Golden Sentry monitoring program is not yet fully implemented. 

DOD issued program guidance in December 2002 that identified the 

specific responsibilities for new end-use monitoring activities. In addition, 

as of February 2004, DOD was conducting visits to Foreign Military Sales 

recipient countries to determine the level of monitoring needed and was 

identifying weapons and technologies that may require more stringent enduse monitoring. The program director stated that he is considering adding 

cruise missiles and UAVs to a list of weapon systems that receive more 

comprehensive monitoring. 

The Commerce Department is responsible for conducting PSVs on exports 

of dual-use technology that might have military applications for cruise 

missiles and UAVs. Based on Commerce licensing data, we found that 

Commerce issued 2,490 dual-use licenses between fiscal years 1998 and 

2002 for items that could be useful in developing cruise missiles or UAVs.17

These licenses were for items to countries including India, Israel, Poland, 

Switzerland, Turkey, and the United Arab Emirates. Of these, Commerce 

selected 2 percent of the licenses, or 52 cases, for a PSV visit and 

completed visits for about 1 percent of the licenses, or 29 cases. 

Other supplier countries place conditions on cruise missile and UAVrelated transfers, but few reported conducting end-use monitoring once 

 17The Commerce Control List does not designate whether an item is useful for ballistic 

missiles or cruise missiles, according to Commerce officials, but identifies only that an item 

is useful for missile technology. The 2,490 cruise missile or UAV-related licenses that we 

reviewed were in dual-use missile-related categories of items in the Export Administration 

Regulations that the Commerce Department determined contain items that could be used 

for cruise missile purposes or for UAVs or their components. 
Page 11 GAO-04-493T Nonproliferation 

they exported the items. While national export laws authorize end-use 

monitoring, none of the foreign government officials reported to us any 

PSV visits for cruise missile or UAV-related items. Government officials in 

France, Italy, and the United Kingdom stated that their respective 

governments generally do not verify conditions on cruise missile and UAV 

transfers and conduct few PSV visits of such exports. The South African 

government was the only additional supplier country responding to a 

written request for information18 that reported it regularly requires and 

conducts PSVs on cruise missile and UAV transfers. 

The continued proliferation of cruise missiles and UAVs poses a growing 

threat to the United States, its forces overseas, and its allies. Most 

countries already possess cruise missiles, UAVs, or related technology, 

and many are expected to develop or obtain more sophisticated systems in 

the future. The dual-use nature of many of the components of cruise 

missiles and UAVs also raises the prospect that terrorists could develop 

rudimentary systems that could pose additional security threats to the 

United States. Because this technology is widely available throughout the 

world, the United States works in concert with other countries through 

multilateral export control regimes whose limited effectiveness could be 

enhanced by adopting recommendations we have made in previous 

reports. U.S. export controls may not be sufficient to prevent cruise 

missile and UAV proliferation and to ensure compliance with license 

conditions. Because some key dual-use components can be acquired 

without an export license, it is difficult for the export control system to 

limit or track their use. Moreover, current U.S. export controls may not 

prevent proliferation by nonstate actors, such as certain terrorists, who 

operate in countries that are not currently restricted under missile 

proliferation regulations. Furthermore, the U.S. government seldom uses 

its end-use monitoring programs to verify compliance with the conditions 

placed on items that could be used to develop cruise missiles or UAVs. As 

a result, the U.S. government does not have sufficient information to know 

whether recipients of these exports are effectively safeguarding equipment 

and technology and, thus, protecting U.S. national security and 

nonproliferation interests. The challenges to U.S. nonproliferation efforts 

in this area, coupled with the absence of end-use monitoring programs by 

 18Governments responding to our request were Israel, Japan, South Africa, and Switzerland. 

Russia’s and Canada’s responses were provided too late to be included in our January 2004 

report. Other countries that we queried provided no information on end-use monitoring. 

Conclusion 
Page 12 GAO-04-493T Nonproliferation 

several foreign governments for their exports of cruise missiles or UAVs, 

raise questions about how nonproliferation tools are keeping pace with 

the changing threat. 

We recommended that the Secretary of Commerce assess and report to 

Congress on the adequacy of the export control regulations’ catch-all 

provision to address missile proliferation by nonstate actors and on ways 

the provision might be modified. We also recommended that the 

Secretaries of State, Commerce, and Defense each complete a 

comprehensive assessment of the nature and extent of compliance with 

license conditions on cruise missiles, UAVs, and related dual-use 

technology. As part of the assessment, the departments should also 

conduct additional PSV visits on a sample of cruise missile and UAV 

licenses. This assessment would allow the departments to gain critical 

information that would allow them to better balance potential 

proliferation risks of various technologies with available resources for 

conducting future PSV visits. 

Commerce and Defense partially concurred with our recommendations, 

which we modified to address their comments. State disagreed with the 

need to conduct a comprehensive assessment of the nature and extent of 

compliance with license conditions for cruise missile and UAV technology 

transfers. However, State said that it would consider conducting more 

PSVs on such technology transfers as it improves its monitoring program. 

Mr. Chairman and Members of the Subcommittee, this concludes my 

prepared statement. I will be happy to answer any questions you may have. 

For future contacts regarding this testimony, please contact Joseph 

Christoff at (202) 512-8979. David C. Maurer, Jeffrey D. Phillips, Claude 

Adrien, W. William Russell IV, Lynn Cothern, Stephen M. Lord, and 

Richard Seldin made key contributions to this statement. 

Recommendations for 

Executive Action 

Contact and 

Acknowledgments 

(320234) 
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